Forensic Analysis · Communications Equipment & Electronic Components · as of Nov 12, 2026
Nortech Systems Inc (NSYS)
A forensic read on Nortech Systems Inc built from its complete SEC filings — financial-health screens, earnings quality, red flags and a quality and risk rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Safe
Financial health
4.2
Distress distance
Clean
Earnings quality
4
Forensic signals
-0.7%
ROE
-7.6%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Nortech Systems Inc earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads 4.2, placing it in the Safe zone. 4 forensic signals were flagged in its latest SEC filings, led by cash conversion.
What the filings flag
0.42×
FY2023–FY2025
Cash conversion.Over FY2023–FY2025, cumulative operating cash flow was 0.42× cumulative net income. Reported profit is not turning into cash. The shortfall is profit tied up in working capital rather than collected — the accrual and receivables lines below show where.Cash conversion: operating cash flow divided by net income, the share of profit that arrived as cash.
1.4%
FY2025
Return on invested capital.Return on invested capital is 1.4% in the latest fiscal year, against 11.3% in FY2023, having run between -0.3% and 11.3% across FY2023–FY2025 with no direction held. After-tax operating profit was $5M in FY2023 and $633,750 in FY2025, with operating income at 4.3% of revenue in FY2023, -0.2% in FY2024 and 0.8% in FY2025. The capital base behind it went from $48M in FY2023 to $45M in FY2025 (-5%), while the revenue it carried went from $139M to $118M. FY2025's operating profit carried a $266,000 restructuring charge that alone took about 0.4 points off that year's return, so about 0.4 of the 9.9-point fall across FY2023–FY2025 is that charge landing in the latest year rather than the capital earning less. FY2024's operating profit carried a $571,000 restructuring charge that alone took about 0.9 points off that year's return; FY2024 sits between the two ends of FY2023–FY2025, so the charge shapes the path between them without moving the change across it.
52d DSO
FY2024→FY2025
Receivables vs revenue.Days sales outstanding moved from 42 to 52 days FY2024→FY2025 (receivables +14% vs revenue -8%). Receivables are creeping up relative to sales. Only 42¢ of operating cash arrived for every dollar of profit reported over FY2023–FY2025 ($2.3M against $5.3M), and the receivables balance is one of the places the rest is sitting. Across FY2023–FY2025 the day count ran 51 → 42 → 52 days, so the latest reading sits on top of a record that was flat or falling before it — one year's move, not a direction the business has been travelling in. Deferred revenue was roughly flat (+5%) over the same period, which doesn't corroborate a benign upfront-billing explanation for the receivables build. Both figures are measured on period-end balances rather than the beginning-plus-ending average, because averaging needs the balance a year before every reading — FY2024's opening balance is on file, but across the 3 fiscal years read here (FY2023–FY2025) the average yields only 2 day counts (1 step), too few to tell a climb from one year's move.DSO (days sales outstanding): the average days the company waits to collect cash after a sale.
77d
FY2024→FY2025
Inventory days.Days inventory outstanding moved from 71 to 77 FY2024→FY2025 (against cost of goods sold; inventory -4% vs -10% in cost of sales). Inventory did not fall as fast as cost of sales, so days on hand lengthened — watch for markdowns.
Key fundamentals
Latest Revenue$118.4M
Revenue Growth YoY-7.6%
Revenue CAGR (2yr)-7.8%
Net Margin-0.2%
Free Cash Flow$2.1M
Return on Equity-0.7%
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Nortech Systems Inc's actual 10-K/10-Q/8-K filings?